Targets of Investment Fraud

  • Baby boomers are the number one target of investment fraud.
  • Defined as the generation born between 1946 and 1964, according to federal statistics, 7,918 baby boomer are turning 60 Every Day, amounting to 330 every hour.
  • Seniors are the favorite target because they hold more than half of all the financial assets in the United Sates.
  • Data published by NASAA details that individuals aged 60 or older make up 15% of the United States population and account for 30% of fraud victims.
  • In July 2006 the Securities and Exchange Commission (SEC) held the first Seniors Summit and published that an overwhelmingly 75% of United States consumer financial assets were valued at $16 trillion and held by households headed by someone aged 50 or older.

Because of the requirement to generate self-employment income to participate in a Solo 401k, the majority of retirement funds are held in IRAs instead of Solo 401k plans. Nonetheless, we have published several pages on this website surrounding investment fraud because we want you to be aware of it, especially since the majority of our Solo 401k clients invest in alternative investments, which are more likely to be targeted then equities.

What Is A Ponzi Scheme?

A Ponzi scheme is an investment fraud whereby some investors are paid with new investors’ funds, but the schemer presents as being returns generated from investments. Often times the Ponzi scheme organizers obtain new investors by promising high returns and generating new client referrals from earlier investors’ friends and family members. Unfortunately Ponzi schemes are often disbanded after large financial damage has been done to generally all investors involved.

The Ponzi scheme gets its name from Charles Ponzi, who did not invent the technique but rather massively incorporated the technique in the 1920s through the arbitrage of international reply coupons for postage stamps.

Additional Information

Investment Fraud

Reasons Solo 401k Plans are Targets of Fraud

Techniques Used by Fraudsters

Tips for Avoiding Fraud

SOLO 401(K)